Calendar Year Based
This method of calculation for premiums, adjustments and surcharges applies when the amount interpretation of the premium schedule is 'Calendar Year' and there is no contract period defined on the policy. In this method, the configured amount applies for the calculation periods that belong to a Calendar Year. The Calendar Year is the year in which the calculation period starts to which the calculation period segment in context belongs.
The calculation logic for determining the amount for a calculation period segment is described in the image below:
This calculation method supports two variants:
-
The per day amount is computed and is then multiplied by the number of enrolled days in the calculation period to which the calculation period segment in context belongs (referred to as Calculation Period Days) - this is referred to as amount distribution _Daily _
-
The configured amount is divided by the number of calculation periods that start in the calendar year. The premium is thus evenly spread over the calculation periods in the calendar year period. This is referred to as amount distribution Evenly.
The table below explains the calculations when an amount is specified as Yearly.
| Circumstances | Amount Distribution Daily | Amount Distribution Evenly |
|---|---|---|
Full Enrollment |
Daily Amount * # Calculation Period Days |
Configured Value / # Calculation Periods |
Partial Enrollment |
Daily Amount * # Actual Enrolled Days |
|
Daily amount is the configured amount value divided by the number of days in the calendar year.
The first step is to determine whether the policy enrollment is full or partial. For this, the system takes into account the overlap in time validity of the policy enrollment with the calculation period.
In case of the enrollment product premium, adjustment and surcharge calculations, the system performs checks to determine if the enrollment is partial or full for the policy enrollment product (or add-on for add-on premium). If the enrollment is partial then the system charges the value (and surcharges and adjustments) only for the days that the person or objects is enrolled irrespective of the partial period resolution setting on the enrollment product. The amount is computed by multiplying the daily amount by the actual number of days the person or object is enrolled.
Next, if the enrollment is for the fully enrolled then the system checks for the applicable calculation variant (Daily or Evenly) which is given by the amount distribution setting on the enrollment product, group account product, group account or group client. Based on this setting, the system then charges either the daily based or evenly based amount for the calculation period segment.
Consider some examples to understand the calculations for this method.
| Each calculation period below will be identified as a single calculation period segment during the premium calculation process |
Configuration
The default time periods are defined as:
| Default Time Periods | ||
|---|---|---|
2015 - 1 |
1/1/2015 |
30/6/2015 |
2015 - 2 |
1/7/2015 |
31/12/2015 |
2016 - 1 |
1/1/2016 |
30/6/2016 |
2016 - 2 |
1/7/2016 |
31/12/2016 |
The calculation periods are defined as:
| Alias | Start Date | End Date | CP Reference Date |
|---|---|---|---|
Jan'15 |
1/1/2015 |
31/1/2015 |
1/1/2015 |
Feb'15 |
1/2/2015 |
28/2/2015 |
1/2/2015 |
… |
… |
… |
… |
Dec'16 |
1/12/2016 |
31/12/2016 |
1/12/2016 |
… |
The premium schedule lines that are associated to BASIC PLAN and COPAY PLAN are defined as:
| Premium Schedule Lines - BASIC PLAN | |||
|---|---|---|---|
Default Time Period |
Age From |
Age To |
Premium |
2015 - 1 |
- |
- |
1200 |
2015 - 2 |
- |
- |
1200 |
2016 - 1 |
- |
- |
1300 |
2016 - 2 |
- |
- |
1300 |
| Premium Schedule Lines - COPAY PLAN | |||
|---|---|---|---|
Default Time Period |
Age From |
Age To |
Premium |
2015 - 1 |
0 |
49 |
1200 |
2015 - 1 |
50 |
150 |
1200 |
2015 - 2 |
0 |
49 |
1200 |
2015 - 2 |
50 |
150 |
1200 |
2016 - 1 |
- |
- |
1300 |
2016 - 2 |
- |
- |
1300 |
Amount Distribution Daily
Consider the situation when the policy is enrolled for the enrollment product from 21/4/2015 to 10/3/2016. The calculations in this scenario are spanning over two periods - the calendar year 2015 and calendar year 2016
| Contract Start Date | Contract End Date | Contact Reference Date |
|---|---|---|
- |
- |
- |
Enrollment Product |
MEP Start Date |
MEP End Date |
BASIC PLAN |
21/4/2015 |
10/3/2016 |
The premium calculations for the year 2015 and 2016 that apply to the policy in this situation are as shown in the table below. The premium is prorated for the month of April'15 and Mar'16 as the PPR setting is supposed to be per day.
| Contract Period | Premium | Calculation |
|---|---|---|
April'15 |
32.88 |
1200/365*(10) |
May'15 |
101.92 |
1200/365*(31) |
June'15 |
98.63 |
1200/365*(30) |
July'15 |
101.92 |
1200/365*(31) |
Aug'15 |
101.92 |
1200/365*(31) |
Sep'15 |
98.63 |
1200/365*(30) |
Oct'15 |
101.92 |
1200/365*(31) |
Nov'15 |
98.63 |
1200/365*(30) |
Dec'15 |
101.92 |
1200/365*(31) |
Jan'16 |
110.11 |
1300/366*(31) |
Feb'16 |
103.01 |
1300/366*(29) |
Mar'16 |
35.52 |
1300/366*(10) |
The prorated amount in April'15 calculation period is given by 1200/365*(10).
The amount for each full calculation period is calculated based on the number of days in the calculation period.
May'15 = Daily Amount * Calculation Period Days= 1200/365*(31).
June'15 = 1200/365*(30) and so on.
From the Jan'16 calculation period onward the premium amount changes to 1300.00. Also, the 'No.of days in the calendar year' changes from 365 to 366 as given by number of days in the year 2016, that is, the calendar year in which the calculation period Jan'16 starts. Therefore, for Jan'16 the amount is given by 1300/366*(31) and for Feb'16 the amount is 1300/366*(29) .
For the Mar'16 the amount is prorated to 1300/366*(10).
Amount Distribution Evenly
The policy is enrolled for the enrollment product COPAY PLAN from 23/10/2015 to 15/4/2016.
| Contract Start Date | Contract End Date | Contact Reference Date |
|---|---|---|
- |
- |
- |
Enrollment Product |
PEP Start Date |
PEP End Date |
COPAY PLAN |
1/10/2015 |
15/4/2016 |
Suppose that the person’s age is 30 years then the premium calculations for the enrolled calculation period in 2015 and 2016 will be as depicted in the table below:
| Contract Period | Premium | Formula |
|---|---|---|
Oct'15 |
108.33 |
1300/12 |
Nov'15 |
108.33 |
1300/12 |
Dec'15 |
108.33 |
1300/12 |
Jan'16 |
108.33 |
1300/12 |
Feb'16 |
108.33 |
1300/12 |
Mar'16 |
108.33 |
1300/12 |
Apr'16 |
53.28 |
(1300/366)*(15) |
The premium amount 1300 applies for the calculation periods from Oct'15 up to and inclusive April'16. The'# Calculation Period' that start in the calendar year 2015 and 2016 is 12. Therefore, an evenly distributed premium amount for the calculation period from Oct'15 to Mar'16 is calculated as 1300/12. The amount for Apr'16 is prorated to (1300/366)*(15).
Different premiums within the Calendar Year
This scenario is possible when the reference date changes with the calculation period within the calendar year
| Contract Start Date | Contract End Date | Contact Reference Date |
|---|---|---|
- |
- |
- |
Enrollment Product |
Policy Enrollment Product Start Date |
Policy Enrollment Product End Date |
COPAY PLAN |
3/3/2015 |
- |
A person is enrolled from 3/3/2015 onward for the enrollment product COPAY PLAN, the premium amount that applies for the person at the time of enrollment is 1300.00. The premium of 1500.00 yearly applies when the person turns 50. Suppose, the person’s age is computed as 50 years starting from the calculation period of July'15. Then the premium calculations for the person in the year 2015 are:
| CP | Premium | Formula |
|---|---|---|
Mar'15 |
103.29 |
1300/365*(29) |
Apr'15 |
108.33 |
1300/12 |
May'15 |
108.33 |
1300/12 |
June'15 |
108.33 |
1300/12 |
July'15 |
125 |
1500/12 |
Aug'15 |
125 |
1500/12 |
Sep'15 |
125 |
1500/12 |
Oct'15 |
125 |
1500/12 |
Nov'15 |
125 |
1500/12 |
Dec'15 |
125 |
1500/12 |
The premium amount 1300 applies for the calculation period from Mar'15 up to and inclusive June'15. The'# Calculation Periods' that start in the calendar year 2015 are 12 Therefore, an evenly distributed premium amount for the calculation period from Mar'15 to June'15 is calculated as 1300/12. Similarly, the amount from July'15 to Dec'15 is given by 1500/12.